REGISTERING AN ONLINE BUSINESS IN INDIA

The internet age has made it possible to buy and sell anything to everything online. Therefore, we see a lots of people – housewives, students, and entrepreneurs etc. starting businesses online. Like any business in the non-virtual world, registration of online businesses can be done. It is not a mandatory one but helpful to acquire legal protection. Registration is important for online businesses as it is asked by payment gateways (PayPal, AirPay etc.) and for invoicing purposes. However, not all payment gateways ask for registration; one of the example is PayUmoney.
If one is planning to register his online business, then he can do so in any form as mentioned below: –

1. Sole Proprietorship – You can register your ecommerce business under Sole Proprietorship at your nearest local municipal corporation office. You need to submit the Shops and Establishment Registration Form provided under Shops & Establishment Act to complete your registration. Along with it, you are needed to submit an undertaking. The fees for registration may vary depending on the state and the city’s municipal corporation area.

2. Partnership Firm – It requires minimum two persons. To register a business as a firm one should follow the steps given:

a. Choose name of the firm;
b. Create a Partnership deed;
c. Apply for PAN Number;
d. Register Partnership deed.

3. Private Limited Company – It needs minimum two directors and does not require any minimum capital. To register a private limited company, follow the steps given below:

a. Two Directors and two Shareholders are necessary;
b. Obtain Director Identification Number (DIN);
c. Obtain Digital Signature Certificate (DSC);
d. Draft Memorandum of Association (MOA) and Articles of Association (AOA);
e. Filings with Registrar of Companies (ROC);
f. Paying stamp duty to ROC;
g. Verification done by ROC;
h. Certificate of Incorporation (CIN) issued;
i. Apply for PAN number of the company.

4. Limited Liability Partnership (LLP) – It is mixture of Partnership Firm and Private Limited Company. To register a LLP follow the steps given below:

a. Minimum two partners are required;
b. Apply for DIN;
c. Apply for DSC;
d. Submit Name Application to ROC;
e. File incorporation documents with ROC;
f. Certificate of Incorporation is issued by ROC;
g. Drafting and filing of LLP Agreement

5. One Person Company (OPC) – A person can also register his business as an OPC. The key difference between OPC and sole proprietorship is the way liabilities are treated. For instance, in an OPC the promoter’s liability is limited in the event of a default or legal issues. On the other hand, in sole proprietorships, the liability has not been restricted. The registration of OPC is very much similar to Private Limited Company.

Author: This blog is written by Ms. Afreen Hashmi, a passionate blogger & intern at Aapka Consultant.

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